This week the World Trade Organisation (WTO) effectively banned European governments from providing launch aid for the next-generation Airbus passenger aircraft, the A350. This puts the launch in serious jeopardy.

The ruling also ends the first part of a six-year legal battle between Airbus and its US rival Boeing, with both sides claiming the other had received illegal state aid.

Boeing argue that Airbus should repay $4bn in government loans for its A380 ‘superjumbo’ and Airbus is waiting for the ruling on its counter-claim that Boeing received prohibited loans from the US government for its 787 Dreamliner. The WTO is expected to announce its preliminary ruling on the Boeing case next month.

Since the WTO stated that loans from the UK, France and Germany to Airbus for the A380 were illegal, the US is threatening possible trade sanctions if similar aid by European governments is given for the launch of the A350.